The EEAG consists of a team of eight economists from seven European countries. It is chaired by Giancarlo Corsetti (European University Institute, Florence) and includes Lars Calmfors (University of Stockholm), Seppo Honkapohja (Universities of Helsinki and Cambridge, vice chairman), John Kay (St. John’s College, Oxford), Willi Leibfritz (OECD, Paris), Gilles Saint-Paul (University of Toulouse), Xavier Vives (INSEAD, Fontainebleau), and Hans-Werner Sinn (Ifo Institute, Munich). The aim of this report is to comment on the state and the prospects of the European economy. With the support of the Ifo Institute it provides a European economic forecast and discusses topical economic issues that are of general interest to policy makers, managers, academics and the European public in general.